I-T notices to bogus demat A/c holders

The Income-Tax Department is sending notices to all the 13 beneficiaries of bogus demat accounts who reportedly rigged the Yes Bank initial public offer (IPO). The notices, issued by the Ahmedabad office of Director General of Income Tax, is being sent as a follow-up action of the market regulator Securities and Exchange Board of India (Sebi), which debarred the 13 entities for their alleged involvement in multiple demat account scam in the Yes Bank IPO allocation. More than 7,000 demat and bank accounts of those found involved in the irregularities have similar addresses but the final beneficiaries are only a few. “We want these account holders to explain their source of their income,’’ said a source in the Income tax department. “The Sebi’s order has been sent to our Ahmedabad offices so that the I-T department can take the investigations further,’’ said the source. The Income-Tax Department had two months ago found another 11,000 bogus demat accounts while raiding a Ahmedabad-based investor. It has been estimated by small investor group Investors Grievances Forum that in Mumbai alone, 100 agents are providing lists of bogus demat account holders so that promoters and merchant bankers can rig their share prices. “Most of the time the bogus demat account account holders are getting a rent of sorts by the online stock brokers who use these accounts to rig share prices,” President of Investors Grievances Forum Kirit Somaiya told this newspaper yesterday. In fact, he said, this racket was going on for a long time which has resulted in the Indian stock markets reaching such highs.